A derivative is a contract between two or more parties whose value is based on an agreed-upon underlying asset , index or security. underlying instruments may be bonds, commodities, currencies, interest rate market indexes and stocks etc.
Derivatives instrument used for speculating and hedging purposes. speculator seek to profit from changing prices in the underlying asset , index or security.
For example, a trader may attempt to profit from an anticipated drop in an index's price by selling (or going "short") the related futures contract.
Derivatives used as a hedge allow the risks associated with the underlying asset's price to be transferred between the parties involved in the contract.
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How it valued ?
Derivative derive its value from underlying asset .Derivatives instrument used for speculating and hedging purposes. speculator seek to profit from changing prices in the underlying asset , index or security.
For example, a trader may attempt to profit from an anticipated drop in an index's price by selling (or going "short") the related futures contract.
Derivatives used as a hedge allow the risks associated with the underlying asset's price to be transferred between the parties involved in the contract.
for more clarification Please Call on 9818956173
hi sir I want information about derivative
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